How much did it cost?

Investigations and audits into spending on the city's 60th anniversary party last summer show spending went far over initial plans. Here's a look at some of the numbers from the city and an accounting firm's estimates.

The celebration was held on June 28 – 30

More than 16,000 people attended

Less than 6,000 people bought tickets for the paid concerts

$315,000: the initial budget for 60th anniversary events throughout the year, including the June party

$518,000: the actual cost of the party alone, which included $209,000 in city money

$35,000 was the planned budget for entertainment expenses. Those grew to $117,000.

$120,000 to $125,000 in ticket sales each night was projected by SUN Grp

$39,327: total ticket sale revenue

- Antonie Boessenkool

Purchasing reforms

Investigations into spending on the 60th anniversary party revealed that city staff had signed off on payments beyond their signing authority and over the planned budget for the event. In other cases, the required purchase orders and competing bids were missing. In the wake of those revelations, the city has instituted reforms, including:

• Retraining all employees involved in purchasing.

• Stressing to Finance Department staff that they are responsible for stopping any spending that is being processed incorrectly or where there is insufficient funds.

• Adding a new "buyer" position for another layer of review for city purchases.

• Forming a committee of the city's finance director, purchasing department staff and other city staff to review the city's purchasing records and policies.

– Antonie Boessenkool

Voices

“Obviously, the (SUN Grp) contract never came to us. … I think it exceeded an amount that should’ve been approved at higher levels.

I think we all bear some responsibility. … Somebody should’ve been overseeing Dan Joyce. You don’t just hand somebody that kind of a carte blanche. The Finance Department broke down, the city manager broke down. There’s a lot of blame to be shared.”

- Costa Mesa City Councilwoman Sandy Genis

“In the end, the public has elected the council to watch these things. … no matter how we could’ve known or not have known.

If a purchase order system … had been followed by our Finance Department … there never would have been more bands hired and more money spent, because that wouldn’t have been allowed. (Investigations by the city and an outside accounting firm found that in many cases, purchasing orders – required as part of the city’s process to pay vendors – were missing from 60th anniversary event payments.)

- Costa Mesa Mayor Jim Righeimer

“The buck stops with me. I’m on the City Council. I was elected, and we hire the staff. And I take responsibility, and we blew it.

I was dubious about who the SUN Grp was from the beginning. … In my mind, this was still a small event. Why do we need a broker-type person (to arrange the bands)?

- Costa Mesa City Councilwoman Wendy Leece

“There was a lot of money spent without any input from the committee, that’s for sure.

- Mike Scheafer, who chaired the 60th Anniversary Committee

“At no point did we ever think that funds that were not approved were being spent, because we were told that everything was within the budget. … So anything that was expended above that was, in my opinion, not authorized.”

- Rob Dickson, member of the Kick-off event subcommittee, part of the 60th Anniversary Committee

- Compiled by Antonie Boessenkool

COSTA MESA – The city’s arrangement with an event marketing group to provide bands for its 60th anniversary party ballooned from an $8,000 initial contract to an almost $127,000 total bill – an example of how the celebration grew into a half million dollar affair that resulted in multiple investigations, paid leaves for two city employees and reforms in the city’s finance department.

In late January, Costa Mesa staff released more than 1,000 pages of documents that show SUN Grp’s increasing costs to bring in bands, plus other problems in how the three-day party in front of City Hall was paid for and planned. The city’s expectations of massive ticket sales were far off base, city staff signed off on payments well above the entertainment budget and the music entertainment portion grew more expensive as pricier bands were signed on to draw crowds, according to the documents, which included copies of checks, invoices, contracts and an analysis of spending on the event by an outside accounting firm.

To prepare for the party last June, the city hired Costa Mesa-based SUN Grp to arrange for the bands and DJs. SUN Grp, or Sophisticates United Network, bills itself as a boutique marketing agency specializing in event production and brand consulting.

Attempts to reach Roland Barrera, the head of SUN Grp, on Monday and Tuesday were unsuccessful.

Barrera has had troubles with federal regulators unrelated to the Costa Mesa party. In December, the Securities and Exchange Commission accused Barrera and three other people of taking part in a Ponzi scheme. The SEC asked the federal court to order all four defendants to repay money they obtained illegally, according to court documents.

COST GROWTH

City CEO Tom Hatch and others have acknowledged that organizers and city staff were under a time crunch to put together the celebration so it could be held June 30, the anniversary of the city's founding.

SUN Grp’s initial $8,000 contract was signed by the city attorney, city clerk and Hatch, according to the documents.

Given the tasks that SUN Grp took on, its contract should have been larger, Hatch said last week. But even more than that, the event shouldn’t have been allowed to grow, he said.

A preliminary budget of $35,000 for entertainment became $117,000, according to the city’s summary of the documents. One band – Eric Burdon and The Animals – accounted for $25,000 of the total. Two stages became three, which meant more security, fencing and labor.

In all, the celebration cost $518,000, though an initial budget of $315,000 was supposed to cover anniversary events all year long, not just the “Kick-off” party, according to an initial budget the City Council approved in early 2013. About a month after the celebration, allegations surfaced that the city's fiscal policies may not have been followed, and the investigations began.The documents released in January are the result of those investigations.

At first, city money paid to SUN Grp was more or less in line with the company’s contract, according to the documents. In April, SUN was paid $2,500 for “talent buying,” plus another $3,000 in May. As the event grew near, SUN Grp took on more work, including added security and fencing and providing portable toilets and sound systems.

Costs then departed from SUN Grp’s contract and came to include $18,000 for “stage rentals,” another $33,128 for “operational labor,” $20,000 for “stage rentals – labor,” $9,175 for “VIP area tents” and more, the documents said.

SUN Grp arranged for almost all of the more than 30 bands and DJs for the event. If bands wanted deposits up front to confirm their booking, SUN Grp in some cases paid those deposits and was reimbursed by the city.

For example, SUN Grp paid $12,500 to secure Eric Burdon and The Animals. That was half of the total payment for the band, and the city later paid the rest directly to the band, according to copies of checks among the documents.

TICKET SALES

Money from concert ticket sales were one way the city hoped to cover the event’s costs. Entry at one of the three stages – where bands including Eric Burdon and The Animals and Chevy Metal performed – required $25 tickets.

The documents from SUN Grp and agreements with the dozens of bands mentioned a potential to sell 5,000 or 10,000 tickets a night for the paid concerts. That would have yielded a “gross potential” of $120,000 or $125,000 each night, according to those documents.

In reality, far fewer people bought concert tickets, according to the accounting firm hired by the city.

“Actual attendance was estimated to be closer to 1,500 to 2,000 people on Saturday with fewer in attendance on Friday and Sunday,” Irvine accounting firm Zamucen & Curren reported on those who bought concert tickets.

The city estimated that more than 16,000 people came to the celebration during all three days. That includes the fewer than 6,000 who went to the paid performances.

Related Links

Adam Green and Binki Shapiro perform on the Main Stage during Costa Mesa's three-day 60th anniversary celebration. FILE PHOTO
Terri Nunn of Berlin performs on the Main Stage during Costa Mesa's 60th anniversary celebration. FILE PHOTO
Chevy Metal performs during Costa Mesa's 60th Anniversary celebration last June. The city recently released documents showing that ticket sales for some concerts fell far short of expectations. FILE PHOTO
The city paid $25,000 to have Eric Burdon and The Animals perform at last June's anniversary celebration event. Burdon's band was the most highly-paid of the celebration. FILE PHOTO
The city paid $25,000 to have Eric Burdon and The Animals perform at last June's anniversary celebration event. Burdon's band was the most highly-paid of the celebration. FILE PHOTO
Costa Mesa celebrates it's 60th anniversary Friday afternoon on Fair Drive. FILE PHOTO

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